Senators demanded answers while ASIC tried to dance

It was during Senate estimates, just over a year ago, that a full-scale inquiry into the corporate regulator's mishandling of the Commonwealth Bank financial planning scandal became inevitable.

It was during Senate estimates, just over a year ago, that a full-scale inquiry into the corporate regulator's mishandling of the Commonwealth Bank financial planning scandal became inevitable.

Australian Securities and Investments Commission deputy chairman Peter Kell was answering questions from National Party senator John ''Wacka'' Williams about the behaviour of one of the CBA's worst-behaved financial planners, Don Nguyen, which had been exposed by Fairfax Media the previous weekend.

''Mr Kell, you do not seem to take a breath when you are answering a question, and it really is quite annoying,'' Cameron said.

''I watched your responses to Senator Williams. Please do not do that to me. This is a very serious issue for ASIC. It is a serious issue for the government. All of the senators are concerned about it. Do not take me on a waltz around the merry-go-round.''

An inquiry was announced within weeks, supported by the Coalition, Labor and the Greens.

The inquiry was to examine ASIC's tardy and inadequate response to years of alleged wrongdoing by financial planners at the bank - a response that took 16 months from the day the regulator was contacted by whistleblowers concerned at the fate of hundreds of millions of dollars entrusted to CBA by thousands of clients.

It attracted a record number of submissions from victims, lobby groups, the bank and the corporate regulator.

When the hearings came around, the senators, led by chairman Mark Bishop, heard from victims of the dodgy advice given by the bank's star financial planners, who were raking in a fortune in bonuses by putting their clients into high-risk CBA products.

The senators heard allegations of fraud and forgery by planners, and of a cover-up by the bank.

Misconduct was allegedly encouraged by a boiler-room culture at the bank's financial planning arms, Commonwealth Financial Planning and Financial Wisdom, that rewarded planners who earned big commissions through putting clients into risky products and ''churning'' investments - moving them around needlessly.

And instead of sacking high-risk planners, including Nguyen at CFP and Financial Wisdom's Rollo Sherriff, the bank continued to allow them to advise clients.

When ASIC launched an official investigation into CBA in March 2010 it included the bank reviewing client files and offering compensation.

This compensation process was formalised in October 2011 with an enforceable undertaking. A total of 1150 customers received compensation, totalling $52 million.

Many complained the bank played hard ball on its offers of compensation, including the Blanches, who had been with the bank all their life and who had lost more than two-thirds of their retirement savings, equivalent to $160,000, and were forced to sign up at Centrelink.

The bank initially offered $6777 in compensation, but after the Blanches produced original documents, which suggested that their file had been doctored, that compensation went up to more than $90,000, without admission of liability.